Monday, October 3, 2011

Indie Games and the Crowdfunding Revolution

It's about time I started balancing out some of these super long articles with smaller ones that are more straight-to-the-point. So the point of this post will be to fulfill my latest class assignment, which demands that everyone in the class make their next blog post as a response to an article about monetizing social media (actually, I think I've already written about this topic...).

Crowdfunding services – websites that act as both a social network to connect projects with backers and as a marketplace or escrow house for project funding – have become a popular business model in the last two years, and several more have sprung up alongside Kickstarter, each with their own perks, quirks, and twists on the basic model.

These articles take a look at the growing popularity of crowdfunding as a tool for independent game developers. Those of you who follow this blog might have realized by now that I like history, and so what caught my attention wasthe idea that this business model could potentially lead to significant changes in the game industry.

What Revolution?

I was personally skeptical as to how big of an impact this funding model could have in this industry, so I did a very quick search for articles on how crowdfunding was affecting other industries, such as film. It seemed as though these articles (all from 2011) all had the same message: crowdfunding is still on the rise but it has yielded incredible results in a few projects. So calling it a revolution is definitely premature.

And yet, crowdfunding is indeed proving to be a very useful tool for helping independent developers gather just enough funds to finish a nearly-completed project. Indie developers are already taking a big risk by funding the game on their own until the game is released, so having this kind of fallback is definitely a great help. If crowdfunding is going to change the industry in any way, it's going to be because it helped many innovative developers bring their games to market.

Crowdfunding is not going to become one of the major methods through which projects get funded. As the article points out, it's very hard for new and obscure games to get much funding, because there has to already be a fan base that can be tapped into. Furthermore, these fan bases are usually formed thanks to previous games that the developer has made, so crowdfunding isn't a very good option for recent startups who are making their first games. There's also way too much uncertainty involved in the crowdfunding process, and so many developers don't consider it as the method of choice for funding.

I can't talk about crowdfunding new games without at least mentioning the Extra Credits Indie Fund, which I had first written about almost a month ago. Like other indie funds, its goal is to fund creative games that would have otherwise never gotten the chance to get published. What makes the EC Indie Fund so special is that it relies mainly on crowdfunding. At the time of this writing, the fund had gathered almost $20,000 USD without even having a game to fund yet.

How about Alpha Funding?

Alpha funding is very similar to crowdfunding. In fact, you might say that most of the successful projects that relied on crowdfunding so far were also practicing a form of alpha funding.

If you're unfamiliar with alpha funding, the best example would be Minecraft. Players can play a very early build of the game (known as the alpha build) for free. Players can then purchase the game in order to show their support for the project. What used to be a side project now had the funds to become a full-time job for the game's creator. The game proved so popular that he even used the funds to hire people to help him develop the rest of the game.

Usually when a game reaches Alpha, it's publisher will decide whether or not to kill the project depending on how successful it might be commercially. Alpha funding, on the other hand, is a much more democratic system where the game's development may only continue if enough players online enjoy the game enough to help fund it.

This is also a dynamic form of funding, which means that if a lot of people are looking forward to a game's completion, then its developers will receive more money to make the game even greater. Unlike with many crowdfunding websites, the developers don't have to limit their fundraising to a fixed time period either. Such as in the case of Minecraft, Mojang has been relying on alpha funding for the past few years. Most crowdfunding campaigns are limited to a few months.

A variant of the alpha funding model is one of the most prominent forms of funding on the iOS and Android app stores. Many app developers (including game developers) release a primitive version of their app for free. If the user enjoys it, he or she may choose to buy the premium version, which usually only has maybe one or two extra features that are hardly worth the money. But the main reason why people still purchase these premium apps is to show their support for the developer. It's almost like giving a restaurant waiter a good tip. The developers can then use that money to support, expand, and polish the app.

haha, I don't know what happened. I was originally planning to stop writing half way through but then I started talking about Alpha Funding. It's still about half the length of Interguild History part 2.